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Montebello financial crisis: City hires new interim manager

May 11, 2011 | 10:27 pm

The City Council of embattled Montebello voted Wednesday to contract well-known real estate consultant Larry Kosmont as its interim city administrator.

The council voted 4 to 1 to approve a six-month contract with Kosmont's firm, Kosmont & Associates, at $25,000 a month. Under the agreement, Kosmont and a consultant with his firm, David Biggs, will share the duties of top administrator of the city and redevelopment agency.

Council members praised Kosmont's experience and connections in the world of development and finance.

"We need Larry's expertise to help us with several large issues facing our city, and we have great confidence in his ability," Mayor Art Barajas said in a statement.

Among those issues, the city is facing insolvency if it can't obtain a loan, and several agencies have launched probes of its finances. The state controller's office began an audit of the city Monday.

Before entering the private sector, Kosmont served as city manager, director of community development and redevelopment director for Santa Monica, Seal Beach, Bell Gardens and Burbank.

Councilwoman Christina Cortez, who cast the dissenting vote, said she felt the city would be overpaying for the contract and questioned the track record of Biggs, who was fired as city manager of Tustin in March.

Kosmont and Biggs will immediately replace departing Interim City Administrator Peter Cosentini.

Also Wednesday, the council approved a plan to substantially reduce the $16.8 million the city’s general fund owes to its redevelopment agency under a controversial loan agreement approved last year.

The council voted to offset $13.57 million of the loan by accelerating annual payments the redevelopment agency has been making to the city to pay its debt service on bonds issued to finance work done at City Hall, the police station and one of the city’s fire stations.

The agency has been reimbursing the general fund for the payments, which currently total about $1.3 million.

The remaining $3.3 million owed by the general fund must be paid by the end of the fiscal year, June 30.

RELATED:

Montebello may face insolvency if it doesn't close budget deficit

California orders audit of Montebello finances

Troubled Montebello's bonds downgraded to junk status

-- Abby Sewell in Montebello

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